US President Donald Trump declared plans to enforce a 50% tariff on all products brought in from the European Union starting on June 1. This announcement has stirred unease in the cryptocurrency market, leading to a correction after an earlier period of upward momentum.

Trump's proposition for the tariffs is a reaction to what he perceives as ongoing trade imbalances and obstructive regulations. He accused the EU of maintaining unjust trade practices that have negatively impacted American enterprises.

Following the news, Bitcoin's value dipped to $108,000 from a previous peak of $111,000, and though it has climbed back to about $109,000, it remains under stress. The overall cryptocurrency market has seen a 4% decrease in the last 24 hours.

Data provided by Coinglass indicates $64.13 million in crypto liquidations within the past four hours, with long positions making up $34.05 million and short positions totaling $30.09 million. Bitcoin saw liquidations worth $24.4 million, with Ethereum at $15.16 million.

The long-short ratio of Bitcoin indicates a nearly equal split, reflecting a short-term ambiguity in the market's momentum. This diverges from the dominance of Bitcoin long positions at 54% in the previous period.

Other cryptocurrencies like Solana and XRP experienced significant volatility, mirroring the unstable conditions across the entire market. Most altcoins witnessed a substantial decrease in long positions, implying that individual traders were taken by surprise by the sudden policy shift.

While the US-China trade agreement earlier brought relief to the cryptocurrency market, signaling that the general economic uncertainty was being considered, Trump's threats towards the EU have reignited concerns. This tariff announcement could set off broader economic upheaval, with European stock indices dropping and US technology shares facing selling pressure.

The situation is evolving, with traders closely monitoring any potential response from the EU or signs of negotiation. With the recent liquidations and volatility, the market appears torn between downward apprehension and attempts at recovery. If the tariff dispute escalates, cryptocurrencies and other risk assets may face further challenges, indicating the potential for sustained volatility amid increasing geopolitical uncertainty.